Value Added Tax (Horses)

asked the Chancellor of the Exchequer whether he has yet completed his consideration of the tax disadvantage suffered by the purchasers of horses in the United Kingdom in respect of which value added tax is charged at the full rate whereas no tax is charged in the Republic of Ireland and tax is charged on only carcase value in France.

[pursuant to his reply, 1 November 1979]: In accordance with the assurance which I gave on 3 July—[Vol. 969, c. 1290]—my right hon. Friend lost no time in writing to the President of the Commission and to Commissioner Burke to protest about those aspects of the VAT treatment of bloodstock in France and Ireland which in our view are in breach of the EEC sixth directive and which constitute unfair competition to the detriment of our own industries. From the replies received from the President and Commissioner Burke it is clear that our points have been well taken and the French and Irish representatives have been informed that the Commission regards the French valuation formula for bloodstock, and the French and Irish treatment of training services, as being not in conformity with Community VAT law. As I explained on 3 July, the Irish exemption for supplies of racehorses is permissible as a transitional derogation under the sixth directive. I met Commissioner Burke personally on 16 October and repeated our concern about the problem and the way it was distorting competition within the EEC. We shall be looking to the Commission to exert its full authority to ensure a speedy and satisfactory conclusion.